As is commonly noted, since its inception, the formula has been 72% accurate in predicting corporate bankruptcies two years prior from the filing. But for a starker example of its predictive abilities, look no further than you local bookstore -- or what used to be your local bookstore, and it now quite possibly a empty storefront full of packing boxes and bare shelves.

Just seven months after that report, the book-selling giant filed for Chapter 11 in February. Borders is now operating while in bankruptcy court thanks to a $505 million in financing it received from lenders led by GE Capital.

The company filed for bankruptcy after reporting a $168.2 million loss in 2010. Management doesn't expect to turn a profit until 2013, and according to its business plan projects relatively flat total revenue growth in 2011 and 2012.

Borders management is now devising a plan to quickly emerge the company from bankruptcy protection and convince creditors it can operate in a changing retail landscape. Right now management is looking at a fall timeline.

As part of this plan, Borders announced it will shutter more than 200 of its superstores, and is prepared to close additional locations. These closures will all be completed by the end of the month.

The company has also renegotiated rent with landlords, which has saved it millions of dollars.

Borders presented a preliminary plan to creditors that include Penguin Group, Random House and HarperCollins, in early April. But according to reports, those creditors were unimpressed, with the New York Times saying some even thought the company would either have to liquidate or put itself up for sale.

The company was chastised earlier in the month when it proposed awarding executives with more than $8 million in bonuses in an effort to retain top employees throughout the bankruptcy process.

Under the proposal, the top five executives would receive an average of $623,000 in additional compensation.

The U.S. Trustee assigned to the case filed an objection, saying the bonus motion is premature and should not be granted. There has yet to be a ruling on the proposal.

Borders has been struggling to retain its executives, noting in a bankruptcy filing that in recent months 25 "significant" corporate employees have left, creating vacancies in the finance, IT, human resources, marketing, merchandising and operations departments.

Ultimate, it's up for debate as to whether or not Borders can emerge from bankruptcy and, if it does, remain relevant in the shattered book industry.